What three main events mean a customer no longer falls into SA?
- ceases to fall within SA
- permanently ceases to be a UK resident
- Dies
What are the three reasons a customer my continue to fall into SA after a source of income ceases?
- The source ceased part way through the year
- they fulfil more then one SA criteria
- they come into SA for a new reason
How can a customer notify HMRC they no longer fall into SA?
enter date of cessation on their return
notify by letter or phone
complete an online form if they are self employed.
When is a notice to file issued in error?
if the customer has already sent a notice to file under a different reference number
HMRC records show the customer did not meet the criteria for SA when the return was issued
the SA record is set up for the wrong year
What must a customer do if a notice to file is sent in error?
Must file SA return unless HMRC agree they do not need to file
What happens to a customer’s SA record if they cease to meet SA criteria?
The record falls dormant and is reactivated if the fall into SA in the future.
If a customer ceases to be in SA then sells an asset, what happens?
If the sale of the asset brings them into SA, they must complete a return showing the capital gain.
When a customer becomes insolvent what happens to their debts?
An insolvency results in money being paid to a practitioner based on amount of debts. They then use there funds to bay creditors
What happens to a SA record when a customer becomes insolvent/bankrupt?
The customer will receive two UTr. One for the period up to insolvency, the otheRs for the period after insolvency.
How is an SA return delt with in the year of bankruptcy?
all income is declared on the return issued from the prebankruptcy period.
This is issued under the old UTR. All new returns are issued under the new UTR.
Creditors are paid off in order of priority, including HMRC.
What is the split in the SA record when a customer becomes insolvent?
the tax year is split into two parts
1. up to and including the date of insolvency
2. after the date of insolvency
After insolvency, what is the customer responsible for?
completing SA returns for year of bankruptsy and beyond
any new debt or SA liability arising after the insolvency date
What new debts may be created during administration of insolvency?
- Capital gains tax from sale of assets
- PAYE liability when continuing to run a business during insolvency
What three things might happen to a customers SA if the emigrate?
- cease altogether
- cease to be taxable in the UK
- continue to be taxable in the UK
How many days must a customer be in the UK to be treated as a UK resident for the year?
183 days or more
What income are UK residents liable to pay tax on?
Whole world income
What income are non UK residents liable to pay tax on?
Income generated in the UK.
What are the 3 conditions to be treated to split year treatment?
- leaves UK to take up full time employment abroad or to accompany a partner who is taking up full time employment
- ceases to have a home in the UK
- meets other conditions
What is split year treatment?
The year a customer leaves the UK is divided into two parts.
UK part
Overseas part
How is income taxed during split year treatment?
UK part of the year- whole world income is assessable.
Overseas portion of the year- only UK income is assessable.
What is an early settlement?
A customer departing the UK before the end of the tax year can request their tax liability is delt with before the end of the tax year.
What are the 5 characteristics of an early settlement?
- always carried out by a nominated officer
- allow any amount owed or owing to be delt with before the customer moves.
- treated as provisional in case something in the future changes.
- do not alter liability due date
- can be subject to a compliance check
What are people who permanently resident abroad liable to?
Income generated in the UK or disposal of UK property
How is the liability of a non-UK resident normally collected?
At source
